Banking sector contingent liabilities and sovereign risk

The global financial crisis has underscored the need to pay attention to contingent government liabilities that could arise from bank failures for sovereign risk management. This paper proposes a simple method to construct a contingent liability index (CLI) for a banking sector that takes into account the size and concentration of the banking system, market expectations of bank defaults, and perceptions of government support to each bank. This method allows us to track potential government liabilities related to bank failures for 32 advanced and emerging economies on a monthly basis from 2006 to 2013. Furthermore, we find that the CLI is a significant determinant of sovereign CDS spreads. Our results suggest that a 1 percentage point increase in the CLI is associated with an increase in sovereign CDS spreads by 24 basis points for advanced economies and 75 basis points for emerging markets on average.

Audit pricing and product differentiation in small private firms : evidence from Thailand

Purpose – There is limited evidence on how differences in economic environments affect the demand for and supply of auditing. Research on audit pricing has mainly focused on large client markets in developed economies; in contrast, the purpose of this paper is to focus on the small client segment in the emerging economy of Thailand which offers a choice between auditors of two different qualities. Design/methodology/approach – This paper is based on a random stratified sample of small clients in Thailand qualifying for audit exemption. The final sample consists of 1,950 firm-year observations for 2002-2006. Findings – The authors find evidence of product differentiation in the small client market, suggesting that small firms view certified public accountants as superior and pay a premium for their services. The authors also find that audit fees have a positive significant association with leverage, metropolitan location and client size. Audit risk and audit opinion are not, however, significantly associated with audit fees. Furthermore, the authors find no evidence that clients whose financial year ends in the auditors’ busy period pay significantly higher audit fees, and auditors engage in low-balling on initial engagements to attract audit clients. Research limitations/implications – The research shows the importance of exploring actual decisions regarding audit practice and audit pricing in different institutional and organizational settings. Originality/value – The paper extends the literature from developed economies and large/listed market setting to the emerging economy and small client market setting. As far as the authors are aware, this is the first paper to examine audit pricing in the small client market in an emerging economy.

Investigating marketing managers' perspectives on social media in Chile

Social media has reached global proportions, yet little is known about firms’ engagement with these Web 2.0 technologies in emerging markets within Latin America. The study investigates Chilean marketing managers’ perspectives on social media platforms, the benefits or barriers to their firm’s marketing practices and the impact they have on the immediate marketing environment based on in-depth interviews. Applying Okazaki and Taylor’s (2013) social media framework the findings provide an understanding of social media’s role for Chilean firms in customer engagement, brand image enhancement, return on investment, and meeting consumer needs through time and place. Additional themes emerged on the use of social media through Smartphones and their value for future marketing activities.

Destination Marketing Essentials [2nd Edition]

Destination Marketing offers the reader an integrated and comprehensive overview of the key challenges and constraints facing DMOs and how destination marketing can be planned, implemented and evaluated to achieve successful destination competitiveness. This new 2nd Edition has been revised and updated to include: • new slim - lined 15 chapter structure • new chapters on Destination Competitiveness and Technology • new and updated case studies throughout including emerging markets • new content on social media marketing in destination marketing organisations and sustainable destination marketing • additional online resources for lecturers and students including PPT’s, test bank and video links. It is written in an engaging style and applies theory to a range of tourism destinations at the consumer, business, national and international level by using topical examples.

Destination image: identifying baseline perceptions of Brazil, Argentina and Chile in the nascent Australian long haul travel market

While the popularity of destination image research has increased exponentially in the literature, there has been relatively little published about perceptions held by international consumers of destinations in South America. The purpose of this paper is to report the findings of a research project that aimed to identify the baseline market perceptions of Brazil, Argentina and Chile amongst Australian residents, at the time of the emergence of this long haul market. Of interest was the extent to which Australians differentiate the three distinct countries versus perceiving the continent as a gestalt. These baseline perceptions enable the effectiveness of future marketing communications in Australia by the three national tourism offices to be monitored over time. Importance-Performance Analysis (IPA) is used as a practical analytical tool to guide decision makers. In terms of operationalising destination image, a key research finding was the very high ratio or participants using the ‘Don’t know’ (DK) option for each destination performance scale item. This finding has practical implications for the destination marketers, as well as for researchers engaged in destination image research in long haul and/or emerging markets.

SME international performance in Latin America: The role of entrepreneurial and technological capabilities

SMEs from emerging markets in Latin America are increasingly engaging in internationalization. Nevertheless, there is limited research into how these firms achieve international performance. This study proposes and tests a conceptual model that considers managerial and technology-related capabilities and their impact on international performance of SMEs. The model uses confirmatory factor analysis (CFA) to develop the underlying multi-item constructs and structural equation modeling (SEM) to test the model with data from 233 Chilean SMEs. Specifically, the model considers the role of international entrepreneurial orientation and Internet capabilities on international market performance, taking into account the mediating effect of international entrepreneurial opportunity recognition and technology-related international networks. Results show that international entrepreneurial opportunity recognition and international networks mediate the relationship between international entrepreneurial orientation and Internet marketing capabilities on SME international performance.

Antecedents of SME export intensity in a Latin American market

Small and medium-sized enterprises (SMEs) from emerging markets in Latin America are increasingly engaging in export-related activities. Nevertheless, limited research exists into the export behavior of such firms. This study proposes and tests a conceptual model that includes the main drivers and inhibitors of export intensity for SMEs from Chile. The model uses confirmatory factor analysis (CFA) to develop the underlying multi-item constructs and structural equation modeling (SEM) to test the model. Results show that manager’s export commitment as well as managerial and organizational resources and capabilities are drivers of export intensity. In addition, the results show that managerial perceptions of internal barriers, such as a manager’s lack of international experience and knowledge, act as significant barriers to developing exports. However, unlike previous findings from developed countries no evidence exists of external cost barriers having a significant impact on export intensity, which is possibly an indication of a competitive business environment in Chile.

Crecimiento y rentabilidad en el mercado emergente brasileño

[ES] En los últimos años, las economías emergentes están tomando las primeras posiciones a nivel mundial. Las consecuencias de la crisis financiera han provocado que inversores y empresas dirijan sus capitales y esfuerzo hacia los mercados emergentes en busca de crecimiento y rentabilidad empresarial que los países desarrollados no ofrecen. En este contexto, el objetivo del presente estudio consiste en analizar el crecimiento empresarial en Brasil durante el periodo 1995-2011 y, más específicamente, sus variables explicativas y la interrelación con la rentabilidad empresarial. Para ello, en primer lugar realizamos la estimación de un modelo de regresión dinámico con datos de panel empleando el Método Generalizado de los Momentos (GMM). En segundo lugar, empleamos un sistema de Vectores Autorregresivos (VAR) para analizar la relación entre crecimiento y rentabilidad. Los principales resultados obtenidos nos indican que la obtención de mayores tasas de rentabilidad proporcionan un mayor crecimiento empresarial, pero no al contrario. Además cabe señalar que el comportamiento del crecimiento empresarial es diferente según la propiedad y el control de las empresas. Además, aportan un mayor conocimiento del comportamiento del crecimiento empresarial en Brasil, siendo útil para la toma de decisiones de empresarios e inversores, y así pueden ser utilizados para la toma de decisiones en el ámbito de la política regional y social.

Operational scales, sources of finance, and firms’ performance: evidence from Vietnamese longitudinal data

This study investigates a longitudinal dataset consisting of financial and operational data from 37 listed companies listed on Vietnamese stock market, covering the period 2004-13. By performing three main types of regression analysis - pooled OLS, fixed-effect and random-effect regressions - the investigation finds mixed results on the relationships between operational scales, sources of finance and firms' performance, depending on the choice of analytical model and use of independent/dependent variables. In most situation, fixed-effect models appear to be preferable, providing for reasonably consistent results. Toward the end, the paper offers some further explanation about the obtained insights, which reflect the nature of a business environment of a transition economy and an emerging market.

The Diminishing Returns to Trade Policy in the European Union

The notion that the EU is a trade power is central to studies of the Union’s international presence. Credible threats to withhold access to Europe’s markets are said to provide the Union with leverage in respect of other trade partners. This paper queries the continuing ability of the European Union to act effectively this way. The current Doha malaise is a symptom of deeper changes in the international trade system. As emerging markets become more affluent and participate in foreign direct investment, their interest in market access per se become less important relative to other areas of regulation.

Beyond Compliance – Below Expectations? Cross-Border CSR, Development and the UN Global Compact.

In this paper, the results of an empirical analysis of a set of 416 descriptive case studies published by corporate members of the UN Global Compact are presented. Although these cases cannot be viewed as representative of the Compact itself or of corporate social responsibility (CSR) and development in general, they can illustrate which kinds of projects are deemed appropriate as best practice examples among Compact members, and therefore indicate the direction, in which predominantly voluntary and business-led CSR might at best be evolving. To help contextualize the analysis, the paper starts with a brief overview of recent academic work on the strengths and limitations of CSR in the light of international development, followed by the empirical analysis of Compact case studies. The results raise doubts regarding the general suitability of contemporary CSR initiatives to tackle some of the most pressing developmental challenges. Instead, only certain topics are commonly addressed, while a number of issues such as anti-corruption measures or labour rights are underrepresented in the case study sample. Regarding the target regions of the best practice examples, the majority is reported on activities based in OECD countries and a small number of emerging markets such as South Africa, India or China, while neglecting other regions such as sub-Saharan Africa (excluding South Africa). From a European Union policy perspective, these results indicate that there is a role to play for the state in order to create a better fit between CSR agendas and the actual developmental needs in the South.

China and the changing landscape of the world economy

The rapid development of emerging markets is changing the landscape of the world economy and may have profound implications for international relations. China is often regarded as the most influential emerging market economy because, during the last three decades, it has become increasingly integrated into the world economic system and its success and failure now affect the well-being of other nations in the world. As the financial crisis in the US and EU intensifies, the economic prosperity of the world depends to a large extent on the sustained development of the Chinese economy and other emerging markets, and vice versa.

An analysis of the talent management challenges in a post-communist country: the case of Poland

There is a dearth of empirical studies on talent management (TM) in the emerging markets, and in particular a lack of research on TM in the countries of the Central and Eastern European (CEE) region. Our empirical study in 58 organisations in Poland, a major economy in the CEE region, is one of the first studies to examine TM in this context. Our study highlights the particular nature of the TM challenges facing organisations in Poland and shows that there is little evidence to suggest that Polish practice is converging with Western models. Our paper suggests that TM is likely to challenge many traditional management practices and attitudes which continue to dominate Polish culture in the period of transition to a market economy.

Entscheidungshilfe bei Internationalisierungsstrategien in der Nutzfahrzeugindustrie durch Competitive Intelligence - am Anwendungsbeispiel Afrika

Die nachhaltige Verschiebung der Wachstumsmärkte in Richtung Emerging Markets (und hier insbesondere in die BRIC-Staaten) infolge der Wirtschaftskrise 2008/2009 hat die bereits weit reichend konsolidierte Nutzfahrzeugindustrie der Triadenmärkte in Nordamerika, Europa und Japan vor eine Vielzahl von Herausforderungen gestellt. Strategische Ziele wie die Festigung und Steigerung von Absatzvolumina sowie eine bessere Ausbalancierung von zyklischen Marktentwicklungen, die die Ertragssicherung und eine weitestgehend kontinuierliche Auslastung existenter Kapazitäten sicherstellen soll, sind in Zukunft ohne eine Marktbearbeitung in den ex-Triade Wachstumsmärkten kaum noch erreichbar. Dies verlangt eine Auseinandersetzung der betroffenen Unternehmen mit dem veränderten unternehmerischen Umfeld. Es gilt neue, bisher größtenteils unbekannte Märkte zu erobern und sich dabei neuen – teilweise ebenfalls wenig bekannten - Wettbewerbern und deren teilweise durchaus unkonventionellen Strategien zu stellen. Die Triade-Unternehmen sehen sich dabei Informationsdefiziten und einer zunehmenden Gesamtkomplexität ausgesetzt, die zu für sie zu nachteiligen und ungünstigen nformationsasymmetrien führen können. Die Auswirkungen, dieser Situation unangepasst gegenüberzutreten wären deutlich unsicherheits- und risikobehaftetere Marktbearbeitungsstrategien bzw. im Extremfall die Absenz von Internationalisierungsaktivitäten in den betroffenen Unternehmen. Die Competitive Intelligence als Instrument zur unternehmerischen Umfeldanalyse kann unterstützen diese negativen Informationsasymmetrien zu beseitigen aber auch für das Unternehmen günstige Informationsasymmetrien in Form von Informationsvorsprüngen generieren, aus denen sich Wettbewerbsvorteile ableiten lassen. Dieser Kontext Competitive Intelligence zur Beseitigung von Informationsdefiziten bzw. Schaffung von bewussten, opportunistischen Informationsasymmetrien zur erfolgreichen Expansion durch Internationalisierungsstrategien in den Emerging Markets wird im Rahmen dieses Arbeitspapieres durch die Verbindung von wissenschaftstheoretischen und praktischen Implikationen näher beleuchtet. Die sich aus dem beschriebenen praktischen Anwendungsbeispiel Competitive intelligence für afrikanische Marktbearbeitung ergebenden Erkenntnisse der erfolgreichen Anwendung von Competitive Intelligence als Entscheidungshilfe für Internationalisierungsstrategien sind wie folgt angelegt: - Erweiterung der Status-quo, häufig Stammmarkt-zentristisch angelegten Betrachtungsweisen von Märkten und Wettbewerbern in Hinblick auf das reale Marktgeschehen oder Potentialmärkte - bias-freie Clusterung von Märkten bzw. Wettbewerbern, oder Verzicht auf den Versuch der Simplifizierung durch Clusterbildung - differenzierte Datenerhebungsverfahren wie lokale vs. zentrale / primäre vs. sekundäre Datenerhebung für inhomogene, unterentwickelte oder sich entwickelnde Märkte - Identifizierung und Hinzuziehung von Experten mit dem entscheidenden Wissensvorsprung für den zu bearbeitenden Informationsbedarf - Überprüfung der Informationen durch Datentriangulation

Home bias persistence in foreign direct investments

The purpose of this paper is to analyse the issues related to home bias and foreign direct investments (FDIs). We study the role of physical, cultural, and institutional distances from home on FDI decisions taken by corporations to assess whether the globalization of the past two decades has reduced their influence. Using the ‘home bias’ framework from the finance literature and the gravity model from the economics literature, we utilize a large sample of both developed and emerging markets, using FDI flows of 6263 unique bilateral country pairs over a 30-year period. We find strong empirical evidence of persistent home bias in FDI outflows, and we show that not only physical distance but also cultural and institutional similarities between host and source countries remain a decisive factor in foreign corporate investment decisions. We also show that such home bias is persistent over time and is observed around the world.